Amazon

Amazon Offers Cheap Prime to Government Aid Recipients

But is Jeff Bezos the new John D. Rockefeller?

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Amazon

Amazon announced today that it is offering half-price Prime memberships to customers who receive certain government benefits. People who qualify will pay $5.99/month to get the usual Prime perks—free delivery, video and music streaming, free books, online storage, etc.—but Amazon's food delivery services are getting the most attention.

You may recall a lot of sturm und drang about food deserts in the recent past—that is, the worry that people in poor neighborhoods lack access to cheap, healthy food in their immediate proximity. While even the U.S. Department of Agriculture concedes that Michelle Obama's pet cause may have been a tad overblown, there's no doubt that grocery shopping is a drag for everyone, and for people with small children, disabilities, or limited transportation access, it can be especially tough. Nearly all low- and middle-income families have access to the internet in the United States, however.

For now, only people with an Electronic Benefits Transfer (EBT) number are eligible (though they cannot use the EBT card to pay for the service), but that covers many people on the biggest assistance programs, including Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC). Amazon started accepting food stamps as payment on qualifying items earlier this year, at the same time as several of its competitors.

Six bucks a month will still be a stretch for some people with very tight budgets. But, just as with middle- and upper-income consumers, users may decide the gains in time and convenience are worth it for them. And cheaper Prime will make it easier and less expensive for poor people to get what they think they need, in addition to those things on bureaucrats' lists of approved purchases.

Of course, Amazon will also acquire new customers, who will likely find themselves handing over an even-increasing percentage of their household income to the online retail giant. Amazon is certainly not above luring customers in with a discounted service in order to get them into the habit of making ordinary, recurring purchases of necessities on the site. I am a victim/beneficiary of Amazon Mom, for instance. And it's true that EBT customers are only eligible to renew the benefit for four years.

Anyone whose high school history curriculum resembled mine might be suspicious that this is some kind of long con predatory bait and switch—that Jeff Bezos is positioning himself to pull a John D. Rockefeller, luring customers in with low prices, gaining a monopoly, and then hiking rates on his captive audience. Is this just another sign that Amazon is the new Standard Oil, ripe for trust busting?

The thing is: Not even Standard Oil was really Standard Oil. The years when the much-maligned firm was most dominant in the market were also the years kerosene was cheaper than it had ever been in the United States. Even at the time the Supreme Court's decision in favor of the breakup of the firm in 1911, Standard Oil had about 150 competitors, including Texaco and Gulf. Likewise, even as Amazon has pushed into new markets and swallowed up competitors (RIP Diapers.com) prices continue to fall, not rise. And of course, EBT holders are free to ignore the offer altogether and continue taking the bus to their closest Target or Walmart.

NEXT: State-Run Single-Payer Health Care Would Be Prohibitively Expensive—and Possibly Illegal

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  1. As someone who worked for Amazon, its a business decision to keep low income people signed up for Prime.

    A huge amount of low income people sign up for Prime for the free 30 days and then cancel. Amazon gets a chunk of change for Prime memberships and they lower costs with cheap included shipping. In other words, unless you ship a bunch of single items with a Prime membership, Amazon makes more money with Prime memberships and average shipping frequency by customers.

    1. There must be a lot of people who have Prime and don’t use it. We’re constantly ordering shit and we save a shitload by paying the Prime membership fee. I can’t imagine having to pay $4 for 2 day shipping every time. It would easily be 5 times the Prime membership for us.

      1. That’s how I do it too. I definitely get my money’s worth out of it on the 2 day shipping alone.

      2. There are. Amazon makes signing up for Prime easy and kind of a default, so many people accidentally sign up for it while checking out. It especially catches new users. Some call to get a refund for Prime annual once they are charged because its an upfront $99 fee.

        For users who purchase on average 2 orders per month, Prime is cheaper than paying for shipping. Free regular shipping is 5-8 days, while Prime is free 2 day. Remember, its 2 day from the day it ships.

        Amazon is the only employer that I worked for that tried to be better for customers. They have their little tricks and they can be slow sometimes but I was impressed.

  2. Hopefully this program is successful enough that they extend it to recipients of other welfare programs like Medicare, Social Security, and the child care and mortgage interest tax deductions.

    1. child care and mortgage interest tax deductions

      Not taking is giving?

      I still think they should be abolished though.

  3. …EBT holders are free to ignore the offer altogether and continue taking the bus to their closest Target or Walmart.

    That’s not how big corporations work. They will roll up to your door with an MRAP and drag you out at gunpoint.

    1. That’s not how big corporations work – they hypnotize and brainwash da masses into believing they need shit they really don’t need. Nobody needs 28 kinds of deodorant – the smart set has gone without any deodorant at all for years. Human beings have survived for millennia without bacon double cheeseburgers or Cokes, without cars or electricity or running water or factory-produced anything – it’s just evil capitalists who have snookered you into believing that life is better with toothpaste than without.

  4. I’m scared. I hope the government comes to its senses and puts an end to this.

    1. [hugs Crusty]

  5. Six bucks a month will still be a stretch for some people with very tight budgets.

    Tightest budget ever? If you can’t scrounge up $6 a month, then go panhandling. You should get your $6 within a half hour.

    1. I remember being poor and the mindset that you just don’t splurge on anything. It wasn’t really a matter of affording this or that, it was more the idea of spending money on it just didn’t enter your mind.

    2. How much is bus fare each time you need to shop? Six dollars may be quite a savings.

  6. Six bucks a month to not have to take a bus?
    Probably a deal, since you can watch prime movies while waiting on the delivery.
    Still going to be an issue for the fruits, fresh vegetables, and meat; but it should cut the travel costs by more than the cost of the membership.

  7. Amazon is certainly not above luring customers in with a discounted service in order to get them into the habit of making ordinary, recurring purchases of necessities on the site.

    Those *bastards*!

  8. This is, I suspect, a strategic move aimed at big retail outfits like Walmart that are gearing up to build competitive online sales sites.

  9. Another wingnut special give away to persons that don’t work. Tax payers sending hard earned money to Amazon.

  10. I am poor, but not on welfare, I worked my whole, but if we were on welfare we could half price..JUST WRONG, my wife is a amazon prime, we are going to cancel prime and not buy from amazon again.

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